Friday, 14 November 2008

BSE Sensex sheds 1.6 pct ahead of G20, Infy falls

BANGALORE (Reuters) – The BSE Sensex fell 1.58 percent on Friday to its lowest close in more than two weeks as the gloomy global economic outlook wilted early gains, with wary investors eyeing this weekend's G20 meeting for some direction.

Infosys Technologies dropped 3.3 percent to a one month closing low of 1,217.90 rupees after CLSA said the tech bellwether might miss its revenue guidance in dollar terms for the December quarter on a worsening global financial crisis.

Tata Teleservices (Maharashtra) gained 12.2 percent to 20.19 rupees. NTT DoCoMo Inc and Tata Sons have priced their joint open offer for up to 20 percent of Tata Teleservices at 24.70 rupees a share.

"There is unwinding happening at higher levels because investors are not feeling confident at all in carrying positions overnight," said Amit Khurana, head of institutional equities at Colin Stewart.

"Investors are not putting too much bet on any ground-breaking announcement coming out of the G20 meeting."

The 30-share BSE index closed down 150.91 points at 9,385.42, its lowest close since Oct. 29, with 23 of its stocks falling. It rose as much as 3.04 percent in opening deals and then dropped as much as 2.82 percent during trade.

"The international outlook is not very clear at this point and, therefore, this kind of volatility will continue," said Amitabh Chakraborty, president equities at Religare Securities.

The index, which has lost more than half its value in 2008 to be one of the worst Asian performers, declined 5.8 percent in the week after rising in the last two consecutive weeks.

Even a sharp fall in annual inflation to 8.98 percent as at Nov. 1 from 10.72 percent a week earlier, expected to open the door for further cuts in interest rates, proved little comfort to the market.

Brokerage India Infoline said in a report any rally would be short-lived as the undertone remained sluggish due to financial sector gloom and persistent concerns over the global economy.

"All eyes will be fixed on G20 meeting in Washington, as leaders of top countries will talk on what needs to be done to solve the current financial crisis," it said.

The G20 summit of industrialised and emerging economies will explore ways to deal with the world's biggest financial crisis in decades. Leaders will be reminded of the deepening economic gloom by a report expected to show the euro zone has slipped into recession.

Economists have lowered their forecasts for India's economy, with many now expecting growth to slow to 7 percent or less in the year to March 2009, sharply slower than rates of 9 percent

and higher clocked up in the past three fiscal years.

Shares in Bharti Airtel rose 3 percent to 650.15 rupees. Citigroup said it had a "buy" rating on India's top mobile operator with a price target of 900 rupees on expected stable revenue share despite the entry of new players.

In the broader market, 1,593 losers outpaced 934 gainers on normal volume of 286 million shares.

The broader 50-issue NSE index fell 1.34 percent to 2,810.35.

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